Terra’s astronomical crash this week has largely affected market sentiment and likely fueled broader crypto weakness.
But the project’s status as a Layer-1 blockchain meant that several tokens, except LUNA and UST, were caught in the crossfire. The network was suspended twice this week, adding to the inconvenience.
The UST crash appears to have undermined investor confidence in the Terra ecosystem. Several DeFi protocols, despite operating independently of Terraform Labs, have seen their values crash to near zero this week.
These losses were also driven by one of the worst crypto market crashes in recent history, wiping out a whopping $900 billion in market capital.
Terra’s fall takes Anchor, Mars in tow
Anchor Protocol (ANC) – Terra’s largest DeFi platform was a major casualty of the crash. Since nearly 70% of the UST offerings were staked on the platform, it saw its value decline rapidly within hours.
The platform was the third largest DeFi platform last week, with a total value of more than $16 billion. Today its value is about $300 million. Anchor’s governance token, ANC, is trading slightly above record lows at $0.20.
Mars Protocol, another DeFi platform on Terra, saw its TVL drop 96% in the past week. The platform’s governance token, MARS, is also near record lows, at $0.1.
Other protocols, including Mirror, Prism and Nexus, are all trading at a fraction of their previous value, around record lows.
Cryptocurrency lender Nexo was also found to have been hit hard by the Terra crash. Its token, NEXO, fell about 45% this week. The platform was brought to light by the crash through a partnership in 2019 that allowed users to deposit on the platform in UST.
Venture capitalists are not spared either
Venture capitalists who had invested heavily in Terra are also facing growing anger from LUNA and UST holders. Zhu Su, CEO of Three Arrows Capital, a major Terra financier, took to Twitter Friday to express his regret and condolences over the debacle.
Su was an outspoken supporter of Terra, who was known for his sometimes controversial comments about other projects. Still, he said he would still support the blockchain.
Other venture capitalists may not be so forgiving. Terra has so far found no buyers in her requests for the $1 billion needed to salvage the project.
With over five years of experience in global financial markets, Ambar plans to leverage this knowledge for the fast-growing world of crypto and DeFi. His main interest lies in finding out how geopolitical developments could affect crypto markets and what that could mean for your bitcoin holdings. When he’s not scouring the internet for the latest news, you can play him video games or watch Seinfeld reruns. You can reach him at [email protected]
The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or the publication is not responsible for your personal financial loss.
This post Not just UST; Terra Crash hits these cryptos hard
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